An Explanation of Optimal Each-Way Bets based on Non-Expected Utility Theory
The purpose in this paper is to demonstrate how the non-expected utility models of Markowitz and Kahneman and Tversky can explain why an agent, chooses to bet each way on a horse. We also show that that appeal to moments of return, such as a preference for skewness of return, ceteris paribus, to explain the choice of the each way gamble over the single win gamble is, in general, invalid.
Volume (Year): 3 (2009)
Issue (Month): 2 (September)
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